Halloween can bring out the scary side in us all. As independent insurance agents, we like spooky, too, but certainly not when it comes to your insurance coverage. Some of the insurance misconceptions floating around out there are downright scary. Here are three in particular that make our blood run cold, and that’s because they could put you at serious financial risk:

Misconception 1: “I have an umbrella policy, so I’m covered for everything.”

Eeek! Though the intent of a personal umbrella policy is to provide an additional layer of liability protection on top of what your other personal insurance policies provide, there can still be coverage gaps.

Business activity is typically excluded from personal insurance policies, including umbrella. If an incident occurs while using your home or vehicle for business purposes, you likely won’t receive any coverage. Spooky!

Umbrella coverage is never your first line of defense. It kicks in after you’ve exhausted your coverage on a primary policy, such as homeowners or auto. If you don’t have a primary policy in place for, say, a boat and you are at fault for a severe accident, your umbrella policy won’t come to your aid until a minimum amount has already been paid toward the liability costs (typically $250,000 per person or $500,000 per accident). This is regardless of whether the damages were paid out of your own wallet or by the insurance company. Yikes!

Umbrella doesn’t assist with your own injuries or losses. It is strictly coverage for when you are sued by another party and found legally at-fault for injuring others or damaging their property. An umbrella policy would never extend to your uninsured jewelry if it’s stolen, or to your home if your dwelling coverage is not enough to fully cover a loss. Oh no!

Oooooh! Like most things in insurance, yes and no. The coverage on your personal auto policy will likely follow you any time you drive any car (at least a car that you have permission to use). But, that doesn’t necessarily mean you’re free and clear to decline the rental car coverage.

If you don’t have collision and comprehensive coverage on your own policy, you wouldn’t have any coverage for the rental vehicle either. If you’re hit with a repair bill for the rental, you’ll have to pay it yourself. Now that should really make the hairs on the back of your neck stand up - especially if the rental is a brand new vehicle!

A rental car agreement may leave you liable for things that your policy just doesn’t cover. Things such as administrative fees, loss of use, and diminished value, to name a few.

One way to take the fright out of standing behind the car rental counter is to understand what your personal auto policy covers before you rent a car. We can help you with that. Your credit card company may also offer some coverage as well, assuming you use your card to pay for the rental. Do your research beforehand so you understand if you have enough coverage or if you should consider purchasing more through the rental agency.

Misconception 3: “No need to review my policy at renewal. I bought the right coverage the first time around.”

Like the boogie man hiding under a bed, an insurance claim could be lingering in the darkness. And, if your policy hasn’t kept pace with your life, you could be looking at an uncovered claim. Gasp!

Maybe you inherited a diamond ring from your great aunt but never scheduled coverage for it. Maybe you built an addition on your home but never updated your dwelling coverage. Maybe you bought a car with cash and forgot to insure it since there was no lender requiring proof of insurance.

A lot can happen in our busy lives. And, when you take the time for an annual insurance review, you may find your coverage is no longer up to the task of protecting the life you have today. Instead, it’s designed for the life you had a few years ago. So, connect with us any time a big life change occurs. We’d much rather have a pleasant conversation about coverage options and solutions for your changing life than explain why something is not covered.

Insurance misconceptions are scary. There’s just too much on the line. But, your own insurance experience doesn’t have to be a fright. Work with your local independent agent to understand what you have and to select additional coverage as needed.